Hepatitis C virus (HCV) is the major etiologic agent of post-transfusion, non-A, non-B hepatitis and is an important worldwide health problem. Since HCV results in chronic infection in as many as 90% of infected individuals of which up to 50% develop cirrhosis (with its complications or portal hypertension, ascites, encephalopathy, and bleeding disorders), the seriousness of the disease is apparent. In addition, chronic HCV infection can lead to highly lethal hepatocellular carcinoma. The only approved therapy of chronic HCV infection is interferon alpha. 50% of patients respond to this medication with normalization of serum liver enzymes (ALT) but only 10-20% continue to show benefit one year after starting therapy. It is currently unclear why some respond to alpha interferon while others do not. Van Thiel, et al. have suggested that hepatic iron concentrations are higher in those patients with chronic hepatitis C who do not respond to alpha interferon. Olynyk, et al. further investigated this relationship in patient with chronic hepatitis C. They discovered that while all patients in the study had a normal hepatic iron index (hepatic iron concentration/age), responders to alpha interferon had a significantly lower hepatic iron index than those who did not. They concluded that hepatic iron may impair the action of interferon or act synergistically with the hepatitis C virus affecting inflammatory activity. Bacon, et al. examined the effect in patients who had previously failed to respond to interferon. In the eight patients studied, there was a significant decrease in serum ALT after phlebotomy. Furthermore, six patients received a second course of alpha interferon for at least four months, and the ALT normalized in two of them. They concluded that hepatic iron may have synergistic effects with HCV on hepatocellular injury in chronic hepatitis C. We propose a trial to further examine these potentially important relationships in chronic hepatitis C patients who have failed alpha interferon therapy. We will investigate the hypotheses that hepatic iron may act synergistically with the hepatitis C virus affecting inflammatory activity. We propose phlebotomizing patients (the induction phase) to decrease hepatic iron stores and determining effects on biochemical parameters (serum ALT and AST) as a primary endpoint, and hepatic histology as a secondary endpoint. These endpoints allow evaluation of iron depletion (phlebotomy) on virologic activity and inflammation. It is possible that decreasing hepatic iron concentration may have favorable effects on hepatic inflammation and viral activity and thus may serve as a primary treatment modality. A complete response is defined as normalization of serum aminotransferases and negative hepatitis virologic titers (PCR). Patients will then be randomized (the treatment phase) to an iron depletion (phlebotomy) group which will also serve as a control group or to a group which will undergo iron depletion and additionally receive interferon alpha, the current standard therapy for chronic hepatitis C. The patients will be followed in prospective fashion. This will allow comparison of iron depletion alone to alpha interferon in the setting or iron depletion as a treatment modality in those with hepatitis C who have already failed a standard course of interferon therapy. The treatment phase will last 24 weeks. A complete response will be defined as described above. All patients undergo a 6 month period of observation to assess sustained resonse rates.